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[2000] TASSC 25
Supreme Court of Tasmania
2000-04-06
Cox CJ
Original judgment source is linked above.
CITATION: State of Tasmania v Muir-Wilson [2000] TASSC 25
Workers Compensation - Proceedings to obtain compensation - Determination of claims - Costs - Generally - Unfettered discretion conferred by statute - General rule of costs following event - Interim decision of Tribunal that genuine dispute existed - Whether Tribunal's decision not to make an order as to costs against worker erroneous.
Sims Knipe Maver & Pereira Pty Ltd v Vince [1999] TASSC 8; Scherer v Counting Instruments Ltd [1986] 2 All ER 529; Latoudis v Casey [1990] HCA 59; [1990] 170 CLR 534, referred to.
Judgment Number: [2000] TASSC 25
1 The appellant seeks to reverse the decision of the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") denying it the general costs of a Reference under the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s81A.
2 The respondent claimed to have sustained compensable injury due to an accident at her place of employment while carrying out nursing duties on 24 September 1999. She first gave notice of that injury, as required by the Act, s32(1), on 14 October 1999. On 8 November 1999, she claimed compensation in respect of neck pains and changed sensation in the hand due to an injury while transferring a patient. She produced a medical certificate supporting her claim.
3 By virtue of the Act, s81(1), the appellant would have become obligated to commence weekly payments to the respondent following the making of the claim unless it disputed liability to do so under s81A(1), and, by virtue of s81AB, had it not adopted that course, it would have been taken to have accepted liability in respect of that claim. On 15 November 1999 within the time allowed by s81A, the appellant disputed liability to pay compensation by way of weekly payments and referred the matter to the Tribunal. The reasons given for disputing liability were:
"1) There is insufficient evidence to substantiate that the injury arose out of and in the course of the worker's employment and, if it is a disease, that the employment contributed to it to a substantial degree. Section 25(1)
4 An appointment for the hearing of the Reference was given for 17 December 1999 but on that day counsel for the appellant sought an adjournment as it did not have all its medical material in respect of causation available. Counsel indicated that irrespective of the medical evidence on that point, the appellant maintained its position insofar as notice was concerned. The application for an adjournment was opposed by the respondent but was granted by the Tribunal and the appellant sought an order for the costs of the adjournment on the basis that it had been unreasonably opposed. The Tribunal reserved its decision. The matter came on again on 23 December 1999 when counsel for the appellant indicated that liability was no longer disputed on the grounds of lack of causation, but that it was disputed on the basis that notice of the injury had not been given as soon as practicable after its occurrence. At that hearing, where no oral evidence was heard but documents were tendered confirming the dates of injury and of notice and the frequency of the respondent's attendance at her place of work after the alleged injury, counsel for the appellant submitted that the Tribunal should find that the respondent did not give notice as soon as practicable and that there was nothing before the Tribunal which would bring her within s37(1)(b), which affords a worker relief from the consequences of such a failure. Counsel for the respondent argued briefly to the contrary. The Tribunal ruled that:
"... the test at this stage is merely that the employer establishes that there is an issue between the parties and that it's not a frivolous issue. ... on the face of the documents received there was quite a delay during which the employer appeared - the employee appears to have been quite aware that she'd suffered an injury and yet failed to give notice of that injury. The questions as to whether prejudice arises in my view only become relevant should the worker seek to obtain the indulgence of the Tribunal to show there was a reasonable cause for not giving notice as soon as practicable and it's at that stage that the question of whether prejudice or not flows would become relevant. So at this stage I am satisfied in relation to the issue of notification that a genuine dispute exists and I'll order in the normal terms that the employer not be obliged to make weekly payments nor pay the cost of hospital/medical expenses."
5 Counsel for the appellant thereupon made application for costs, not only those of the adjournment which had been reserved, but also the costs of the Reference generally "on the basis of the costs following the event". The Tribunal declined to order the costs of the adjournment and on the appeal, any challenge to that ruling was abandoned by counsel for the appellant. The Chief Commissioner, who constituted the Tribunal, said:
"In relation to the reference generally, it's not the practice of the Tribunal to award costs in 81A matters on the basis that referrals are made to the Tribunal on the basis of a statutory obligation and to use the general rule the costs follow the event would in many circumstances cause a prejudice to workers who would be brought before the Tribunal through no fault of their own other than making a claim for compensation. I also note in respect of it generally that the adjournment last week was sought on the basis of seeking medical advice and yet the employer at the hearing of this matter did not rely upon same. So the application for costs is dismissed."
"59 (1) Except as provided in subsection (2), the Tribunal may make such order as to costs as it considers appropriate in any proceedings before it.
(2) The Tribunal may not order costs in respect of a conciliation conference conducted under section 43A unless it appears to the Tribunal that a party to the conciliation conference has unreasonably obstructed or prolonged proceedings."
7 On several previous occasions, judges of this Court have emphasised that the Tribunal's discretion as to costs is an unfettered one (Clousen v Taylor A57/1996, per Slicer J; Lowrie v State of Tasmania 109/1998; Farrow v State of Tasmania [1997] TASSC 62; (1997) 7 Tas R 127, also per Underwood J; and Sims Knipe Maver & Pereira Pty Ltd v Vince [1999] TASSC 8). Ordinarily, costs will follow the event. In the last-mentioned case, Evans J, at par5, noted:
"Circumstances recognised as warranting a departure from the usual order that costs follow the event are:
* conduct on behalf of the successful party, other than that which gave rise to the claim, which could be described as unreasonable or improper; and/or
* whether the successful party did something connected with the institution or the conduct of the proceedings calculated to occasion unnecessary litigation and expense. See Unilever Australia Limited v Gunn and Another 143/1998, Underwood J at 5."
At par12, he observed in respect of a submission that the unsuccessful worker had nevertheless acted reasonably in pursuing her claim:
"Many unsuccessful litigants act quite reasonably in pursuing or defending a claim. Reasonable conduct on the part of the unsuccessful party to proceedings does not deprive the successful party of his or her entitlement to an order for costs. Farrow v State of Tasmania (supra) at 133 and Lowrie v State of Tasmania (Education Department) 109/1998 at 4."
8 Section 81 imposes an obligation on an employer to commence weekly payments of compensation very shortly after receipt of a claim unless the provisions of s81A are utilised by the employer to dispute the liability to pay compensation. The employer disputing liability must, within 14 days of receipt of a claim, serve written notice on the worker that he is doing so, give his reasons for disputing liability and refer the matter to the Tribunal. He must, at the time of referring the matter to the Tribunal, advise it in writing whether or not weekly payments are being made to the worker pending determination of the matter by the Tribunal. Armed with this information, the Tribunal can determine what priority to give to the Reference.
9 The present case differs from the ones I have cited in that they were all cases where the question was what order for costs ought to be made after the final determination of the claim for compensation. Here the determination of the Tribunal is very much an interim one. All that has so far been determined is that there is a genuine dispute as to the giving of notice and the fact that it is genuine justifies relieving the employer of the present obligation to pay weekly compensation and he is not taken to have accepted liability in respect of that claim (s81AB). If the worker wishes to pursue the claim, she may still do so at a hearing where all issues in contention will be canvassed.
10 A workers compensation claim cannot be equated with an action where both parties can maintain a measure of control in bringing it to a final conclusion. There is no equivalent of an application for summary judgment on the grounds that the defendant has no defence nor an application to strike out a claim for want of prosecution. There is no provision for discontinuance nor for listing a claim for hearing after a finding of genuine dispute if the worker chooses not to file a Reference. It is possible that some workers who unsuccessfully oppose orders in favour of an employer under s81A may never list the claim for final determination and thus, it is submitted by the appellant, deprive an employer of any opportunity to recover the costs he has incurred in respect of an unmeritorious claim. In an action, on the other hand, the defendant has a number of options available for achieving finality and obtaining costs orders. In actions, it is often the case that a party may succeed on an interlocutory application without obtaining an order as to his costs. Speaking of orders for costs in respect of an interlocutory step in an action, Buckley LJ, giving judgment on behalf of the Court of Appeal, said in Scherer & Anor v Counting Instruments Ltd & Anor [1986] 2 All ER 529 at 536:
"... the circumstances may be such that it is not then possible to see on which side justice requires that the decision who should bear the costs of that step should ultimately fall. This may depend on how the issues in the action are eventually decided. Consequently, costs in interlocutory matters are often made costs in the cause or reserved."
(See also Williams' Supreme Court Practice, 2nd edn, p 2456; Quick on Costs, par 4.2890.)
11 While workers compensation claims do not proceed in the same procedural way as actions, I think it is a valid observation that in respect of an interim step in which the employer only has to show an arguable basis for disputing the claim, it will often not be possible to see on which side justice requires that the burden of the costs of that step should ultimately fall. I conclude that the discretion being unfettered, it does not inexorably follow that the worker should pay the employer's costs of the Reference merely because the latter demonstrates that there is a genuine dispute within the meaning of s81A.
12 The practice of the Tribunal cannot dictate the order which was appropriate in this case if that practice is erroneously based. However, it should be remembered that the employer had no option but to refer the matter to the Tribunal if it wished to be relieved of the acceptance of liability which the Act otherwise imposes, whether or not the worker was prepared to concede the genuineness of the employer's resistance. In Latoudis v Casey [1990] HCA 59; [1990] 170 CLR 534, McHugh J said at 567:
"An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connection with the litigation: Kelly v Noumenon Pty Ltd (1988) 47 SASR 182, at p 184. The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred."
Where there is a Reference under s81A, it is not the case that the worker "has caused the other party to incur the costs of (that) litigation." They are expenses which the employer necessarily incurs in obtaining the relief he seeks. They may be increased by fruitless resistance on the worker's part and this may justify an order that he pay at least the costs occasioned by that resistance; but in the circumstances of this case, it would appear that a significant ground relevant to the issue of the genuineness of the dispute was raised by the appellant and maintained over an adjournment only to be abandoned at the final hearing of the Referenece and that the amount of time spent in respect of the issue of delay was minimal.
13 It may be that in some cases justice can be done by reserving the question of costs and giving the parties the opportunity to resolve it after the claim has been litigated or, if the worker fails to pursue the claim, after a reasonable time has elapsed. In some cases, the proper course will be not to make any order as to costs. In the present case, the circumstances were such that the Tribunal's decision not to make an order as to costs cannot be said to have resulted from an erroneous exercise of its discretion. The appeal is dismissed.
# State of Tasmania
Muir-Wilson \[2000\] TASSC 25
(1997) 7 Tas R 127
(1988) 47 SASR 182